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Hall of Famer [21833]
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I'm from the Fed, and I'm here to help
Apr 21, 2021, 10:16 AM
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Y'all wanna start talking about stuff that matters yet, or still gathering around the watercooler talking about all this racism and those pesky red / black ants?
Fed currently sitting at a $8T balance sheet number. At least a $2T "infrastructure" bill coming down the pipe, and QE (wait, not QE this time...mk) with no expiration date.
We're at peak liquidity levels, on the brink of hyper inflation (re: lumber, iron).
What's the solution? Anyone care or nah? We got kids in cages, Tweeter, evil white men, and dudes trying to be chicks to worry about so I get it...
We can't tax our way out of this situation. People paying "their fair share" is about as true as every white person being racist. If you believe that's a solution, you might need to get out a calculator and do some quick math.
I'm of the opinion that the solution here is for the Fed to immediately start tightening and for our economy to organically re-boot and work itself out of this hole. Probability of that happening = 0.0000001%.
We've opened Pandora's box of giving citizens helicopter money, and we don't have the technology or capacity to ramp up pre-Covid productivities without the workforce coming back. And yes, it's a problem. No one can find labor. Our manufacturing (automation) is booked through next year. Prices are going to continue to rise while the market melts up with all this liquidity and wages stay stagnant. Obamanomics baby, let's go!
All this money that's been dumped into our economy has likely already been spent. And on what? Oh, some cool #### made in Asia. At 50-80% margins. Lol.
What's next? Digital currency (re: UK and China).
And if you come in here with that red team / blue team ########, you're part of the problem. Uniparty4Life
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All-In [40656]
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Lotta folks aren't going to like this
Apr 21, 2021, 10:20 AM
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Or really understand it, so they won't respond to it. But if you were to post this on twitter, you would be deemed a racist for not acknowledging how this impacts POC communities more than white communities.
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All-In [46768]
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Hall of Famer [21833]
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I agree that "infrastructure" is a critical component
Apr 21, 2021, 10:40 AM
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However, that is far from the answer here. If anything, that will exacerbate the problem in the long term. We're still throwing fiat money at the problem.
Who owns the firms executing or implementing proposals as part of this bill?
Where are the bulk of goods manufactured to meet the requirements?
Where will we find the labor?
What happens to the cost of materials (that are already sky high) and what are these impacts to the private sector?
What are the impacts to the USD and how will that trickle down to the middle class?
We're spending trillions and trillions of dollars that are flowing into foreign countries' GDP.
I think the problem statement is that there is too much liquidity in the economy right now, and it's inversely affecting the vast majority of Americans. Throwing more liquidity into our economy at this point is going to have adverse affects.
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All-Conference [400]
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Re: I agree that "infrastructure" is a critical component
Apr 21, 2021, 10:49 AM
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There’s a lot of labor stuck on the other side of the southern border.
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Hall of Famer [21833]
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So for the record
Apr 21, 2021, 10:51 AM
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the strategy is to bus in poor brown people to prop up our economy so we can give 'Muricans more helicopter money from the Fed?
I'm sure we can fit a bunch of Chinese on a boat too.
Eff it, I'm in!
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All-Conference [400]
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Re: So for the record
Apr 21, 2021, 11:02 AM
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I wouldn’t necessarily call the economic incentives that influence the movement of peoples to America from other countries “propping up our economy”, but yeah pretty much. Or is there some reason the law of supply and demand fails when it comes to labor markets?
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Hall of Famer [21833]
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This is a fun topic that plays into the broader conversation
Apr 21, 2021, 11:28 AM
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We currently have 9.7 million eligible workers who are unemployed, as of the 4/2/21 report from the BLS. Another 1.9 million people NOT in the workforce who are looking for a job. Let's call it 12M since this is government work, eh?
So...why immediately jump to bringing in labor from other countries? Besides the snarky remark on the whole supply / demand hem-hawing, I think by the numbers we have resources here who can work, no? So the supply is there, seemingly, and a good percentage point of the demand is there to support it.
What has changed between pre-Covid and post-Covid that could affect incentives to work?
Why are they not working?
Why is it that firms across the board are having issues finding labor, when we haven't reached our traditional threshold of labor issues (3-3.5%)?
Bringing in immigrant labor will drive down the wages for American's vying for those spots. Back to your whole supply/demand conversation...why pay an American $19/hour to pick your wife's panties into a tote, when I can get Jose who just showed up to do it for $12/hour. Who cares if he sends that capital back to Guatamala, or that the shareholders benefit the most from this move, right? Not to mention the Laos sweatshop who got those panties made for $0.75 / hour.
That's a pretty racist strategy (hehe...had to sorry) that benefits shareholders over the working class on a larger scale and longer timeline. But hey, your wife's panties stay the same cost and you get your 2.5% annual raise, right?
Pssssssssssssst........this is how we got here. This is the status quo.
Another issue, not entirely related to this topic, is that we're going to run into a demographic issue as the labor pool ages out. On top of battling the economic side of this conversation (helicopter money), we're going to need to solve for this (likely with immigration). Proportionally, from a skillset perspective, we're not in a position to face this challenge. Again, another discussion.
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All-In [46768]
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I wonder how much your last paragraph is playing
Apr 21, 2021, 11:36 AM
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in this worker shortage issue we have.
A lot of boomers (of which there is an abundance) were not retiring when they could. Now that they had to stay home, I wonder how many are like, "#### it I'm not going back out there"
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All-Conference [400]
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Re: This is a fun topic that plays into the broader conversation
Apr 21, 2021, 1:12 PM
[ in reply to This is a fun topic that plays into the broader conversation ] |
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Our March unemployment rate was about 2.5% higher than pre-covid levels, and unemployment is on an overall downward trend. Not sure if there has been a sustained increase in people leaving the labor market, maybe you have more data about that.
If you’re worried about hyper-inflation, arguing that we should place constraints on the workforce in this country is absurd. You dismissed my supply/demand point as a snarky remark, but it wasn’t intended to be. An increase in immigrant labor would create more competition for these jobs, which in turn reduces inflationary pressures. Yes, it may reduce wages for Americans competing for these jobs, but according to you Americans aren’t competing for these jobs and we’re starting to see an increase in the wages necessary to attract American workers. Free movement of labor means rising wages will attract more labor into the country and this will prevent excess wage inflation. Allowing economic conditions to control the flow of workers in and out of the country seems like it would be far more economically productive.
As far as immigrants sending money back to their home countries goes, this article provides some pretty decent evidence as to why that actually ends up benefiting the US economy.
https://www.google.com/amp/s/amp.cnn.com/cnn/2016/04/08/opinions/remittances-good-for-america-sandefur/index.html
If you’re really concerned about unemployment and inflation, why not look to immigrants as part of the solution?
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Lot o points [155578]
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It seems you’re disinterested in exploring the variables and
Apr 21, 2021, 2:22 PM
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Conditions that have led to capable Americans not seeking those available jobs. Might be a worthwhile thing to examine before shrugging, considering it the new status quo, and opening the southern floodgates.
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Hall of Famer [21833]
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I agree with you that immigration is and will always be a
Apr 21, 2021, 2:55 PM
[ in reply to Re: This is a fun topic that plays into the broader conversation ] |
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piece of the puzzle. Apologies if it came off as opposition to that notion. However, the immediate answer to our labor issues should not, in my opinion, be to bring in foreigners to do jobs that Americans won't do, while a broad faction of Americans are complaining about the economic status of Americans.
That notion, in my opinion, is the epitome of leveraging lower economic status people from other countries to prop up our economy. When we've exacerbated our ability to continue economic growth, and need additional labor, then yes, let's find people to work here. I don't believe we are at this point.
Bringing in cheap labor to produce cheap goods is a continuation of what got us here. Cheap labor yields good margins which yields solid returns to the ruling class. Maybe it's an old school opinion, but in my view, if we can leverage the American workforce to generate true GDP growth, then everything will take care of itself. That's the inflation we need, not this asset inflation due to the Fed and stagflation across key material and service sectors because of the ridiculous amount of liquidity and the inability to satisfy the demand (i.e. lumber mills) due to inadequate productivity levels (for whatever reason: labor, COVID shut down, supply chain issues).
I respectfully disagree with the CNN article, in as strong a manner as possible. If Americans are working and generating value in the respective area of this country, I hope they're leveraging their gains to build up their areas around them from an economic perspective. My engineering mind's interpretation of the old Henry Ford model. People make money in their town, people spend money in their town, people take care of their town and those who live in it -- probably another thread as well.
BUT, my main issue with unemployment is that we have unemployment levels that are not at a critical mass stage and yet countless firms unable to find labor. That's a problem and I feel pretty strongly that the recent injection of helicopter money from the Fed is the culprit. So in this sense of supply / demand, the supply is there but the wages from the private sector have to compete with the wages of the government for unemployment. I don't see how else you can word this...people are evaluating unemployment $ vs working $ and choosing the former, based on my observations in my sector (supply chain).
I guess everything just boils down to: What's the goal here? From a policy perspective...are we looking to get back on the status quo? Or will there be an attempt to grow the working class by generating true GDP growth?
And apologies for misinterpreting the snarkiness and responding w/ said snarkiness. It is fun to blow up an economics conversation by throwing your hands up and saying, supply / demand, duh lol.
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All-Conference [400]
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Re: I agree with you that immigration is and will always be a
Apr 21, 2021, 3:38 PM
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I think your assessment of why Americans firms are struggling to find labor right now is likely true. Stimulus checks and unemployment benefits aren't going to last much longer though, so I'm hopeful that problem is temporary.
I think the problems with cheap labor tend to lie outside of the US, which explains why we've seen so much outsourcing. Other than illegal immigrants, there's not a real source of super cheap labor here.
You may be right about the economics of remittances, it's not something I know a lot about. Either way, it seems like immigrant labor would be a boon to our economy on the whole.
I'm not sure what exactly you mean by status quo and true GDP growth. If you're talking about an economy based on globalization, free trade (with certain geopolitical exceptions), and the free movement of labor across borders then, yeah, I do want that. I think these economic policies have been broadly successful here and around the world.
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All-In [26467]
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When China comes to collect
Apr 21, 2021, 10:23 AM
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Joe will give them the ol Cornpop treatment
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All-In [46768]
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Can you explain to me why China would
Apr 21, 2021, 10:24 AM
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"come to collect"
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Hall of Famer [21833]
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They're holding over a trillion in T-bills
Apr 21, 2021, 10:47 AM
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What's more scary than them "coming to collect" is them dropping them all at once and devaluing the debt bills we're floating throughout the global economy, putting more strain on the USD...IMO at least.
If they "come to collect" they'd lose. We may be experiencing them collecting now though, but that's for another thread lol^.
^I'm a sucker for a good conspiracy!!
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All-In [46768]
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That's my point. Each industrialized country holds each
Apr 21, 2021, 10:51 AM
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other's debt as a mutually insured destruction policy
China isn't going to collect on the debt and sink our economy because we are their largest market.
It will sink theirs as well
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Oculus Spirit [80954]
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China holds about 18% of US real estate (both personal and
Apr 21, 2021, 2:01 PM
[ in reply to They're holding over a trillion in T-bills ] |
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commercial) held by overseas owners. They were on a real estate buying binge from about 2010-2019. That amount has shrunken in the last few years though.
China produces 97% of U.S. antibiotics and about 80 percent of active pharmaceutical ingredients used in American drugs.
In 2017, the United States produced zero rare earth minerals. China, on the other hand, accounted for more than 80 percent of the world's supply.
They own us, figuratively, and literally.
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Lot o points [155578]
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You ain't kidding on labor.
Apr 21, 2021, 10:26 AM
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I'm up to $30/hour for lightly skilled/willing to train employees and coming up zeroes.
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Oculus Spirit [80954]
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Nine meals from anarchy***
Apr 21, 2021, 10:28 AM
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Orange Blooded [2669]
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Re: I'm from the Fed, and I'm here to help
Apr 21, 2021, 10:29 AM
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You are correct on just about everything in this thread. It’s very worrisome.
The lack of labor is very significant. I have a friend in the meat production industry. They are only at half capacity due to no labor to produce. And all the meat that they have coming down the pipeline is having to go in the freezers. Tons of restaurants in my local town are not doing takeout anymore and can’t even seat at full capacity due to labor. It’s goiby to get worse before it gets better
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CU Medallion [73569]
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I'm guessing bc people.are getting free money?***
Apr 21, 2021, 10:44 AM
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Oculus Spirit [78823]
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Re: I'm from the Fed, and I'm here to help
Apr 21, 2021, 10:49 AM
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.
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All-In [34092]
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The top 1%, and more like the top 0.01%,
Apr 21, 2021, 10:54 AM
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are in their own world when it comes to assets and ability to purchase stuff like real estate, which is why no one can afford to live in places like NYC anymore. Inflation in prices for certain things, real estate being one of them, has greatly outpaced inflation generally. The effects spread everywhere, not just where the super-rich buy stuff up.
I know that people hate when the government takes money from rich people, but when it comes to the top 0.01%, they need to be taxed much much more, partly to address the growing government debt but also just to prevent the growing oligarchy and driving up prices beyond most of our ability to pay. Someone recently posted a house outside of Seattle or somewhere, little crummy starter home for half a million dollars. That's what I'm talking about.
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Oculus Spirit [97647]
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Taxing assets is generally NOT a good idea, any more than
Apr 21, 2021, 11:49 AM
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relying on their "net worth". You tax labor, to preserve value in the dollar. The "top 1%" in assets are not necessarily the top 1% in income. Most aren't. Their pay is limited to other forms of payment.
Here, read this:
(LINK)
In Amazon’s US:AMZN 2019 Proxy Statement filed Thursday with the Securities and Exchange Commission, the e-commerce and cloud giant disclosed that Bezos was paid a base salary of $81,840 in 2019, the same as in 2018 and 2017. In fact, his base salary in 1998 was $81,840. Amazon went public in May 1997.
The Amazon chief executive’s total compensation last year was $1,681,840. That included $1.6 million in security services for Bezos, in addition to the security arrangements provided at the company’s facilities and for business travel.
***********************************
Ok, for the purposes of the IRS, they can tax Bezos' income of $86K. Fine, he pays less tax than I do. Then they can tax the additional benefits he receives (travel perks, etc.) at a lower rate than the income tax. His assets, are untouched. If he sells stocks, he's only taxed capital gains, which is WAY less than the top income brackets. This is what people don't understand, at all. Democrats rant and rave about increasing the INCOME tax. That doesn't hurt the rich. That hurts the middle and upper middle class, but not the rich, or especially the super rich, top 1% whatever. And the only other way the IRS can touch Bezos with taxes is if he chooses to sell some stock for whatever reason. Until he sells them, nada. IF he sells them, then they get what, 12% or something. A small fraction of the top income tax bracket.
And this is why tax revenues, since World War 2, have ALWAYS extracted between 15 and 20% of GDP. ALWAYS. That's with a 25% top INCOME bracket, or a 90% top INCOME bracket.
Now states have a long history of taxing assets, it's called property taxes. Even then, that's limited to real estate, NOT stocks or other assets. But the federal government has no history (can't legally I think) tax asset holdings, until the asset is sold and income is realized. And the reason that has never been done is because that is in effect injecting dollars into the Treasury based on unearned labor. Now in the past, that money would then have been used to pay for crap, at which point it would have created an inflationary impact as it would have been extracted from Wall Street, and spent by the Treasury and ended up in a pocket buying a Big Mac. But with $30 trillion+ in debt, I expect an asset tax COULD be used and taken in as revenue, IF the revenue was solely limited to debt repayment.
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All-In [34092]
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Re: Taxing assets is generally NOT a good idea, any more than
Apr 21, 2021, 12:00 PM
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I'm familiar with your "tax the labor" theory, because we've discussed it in the past and I disagree strongly with it (we can go into it again if you want, but we stick to our guns every time).
That being said, my post wasn't meant as a proposal for a new "asset tax." Income tax is a reasonable proxy for wealth. And I prefer to tax unearned income (i.e. wealth handed to someone without labor involved) than earned income (through labor). Of course our income tax system applies to both types.
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Oculus Spirit [97647]
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Income tax is a reasonable proxy for wealth?
Apr 21, 2021, 12:29 PM
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Not in the past 20+ years.
Jeff Bezos' income is $81K. Not sure, maybe $1.6 million with his perks from Amazon, but I don't think that's taxed as income. But either way, that's not even a close proxy for his "wealth".
Raise the top income bracket to 95%, and Jeff Bezos pays the SAME amount in income taxes.
I just googled "Income tax is a reasonable proxy for wealth"
And got this, and a whole pageful of other similar articles.
https://www.cbpp.org/research/federal-tax/substantial-income-of-wealthy-households-escapes-annual-taxation-or-enjoys
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All-In [34092]
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Is there a better proxy for wealth?
Apr 21, 2021, 12:40 PM
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I'd rather tax wealth than income, for the Bezos-type reason.
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Oculus Spirit [97647]
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What gets me is the people today all jealous and angry over
Apr 21, 2021, 11:22 AM
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the "assets" of the top 1%, are going to be the same ones screaming when the "economy" tanks when those assets are devalued. The greater your "assets", for most people, the higher your exposure to inflation and debt devaluing your "assets".
10% inflation and that blue area matches the red. And as inflated as our analysis of our current economy is today, when the bubble pops and all this debt collapses, we will not be in as bad a shape as everyone thinks either.
Some of the late 1970's economic numbers under Jimmy Carter were what would today be considered exceptional and incredible economic numbers today. However at THAT time, we were told the economy sucked because inflation was high, because of the "good" economic numbers. Enter Reagan and our debt economy. Legislate to deflate the dollar, make debt cheaper to service, then you can spend more and have more buying power with cheaper labor. GREAT economy. Biggest in the history of history really. Until it isn't.
And for the very last time, no multi-billionaire is "worth" the market valuation of their stock holdings. It's all BS. Most companies are not "worth" their market capitalization. Apple is, possibly, in what, 60+ years, assuming their stocks level off to match inflation for the same period. Jeff Bezos net worth was $113 BILLION last year. Dirty little secret, he possesses $113 billion of mostly Amazon stock. As such, it's only that, Amazon stock, until he sells it for gold, real estate, or dollar bills. Let's say old Jeff wants to to buy $113 billion in gold, or cash, or bitcoin, or whatever......fine. So he sells his stock, totally. First off, the market is now flooded with more Amazon stock than anyone is willing, or capable of buying. So the value instantly plummets. He couldn't even unload all of it. He would end up with pennies on the dollar. Surely still a billionaire, but what could he actually get his hands on? I'd argue a small fraction of his total "assets". Maybe 10-15 billion, I dunno, no one has ever tried that because no one is dumb enough to try because they know they instantly lose more than half of their "net worth" into the ether from which it came to be.
It's so much BS.
This is why investors always say diversify. Because your net worth is only worth what people are willing to pay you for what you have. If you're 100% in stocks, especially a single stock, that's a dangerous place to be. I'd argue if you had $50 billion spread equally in stocks, gold, other commodities, real estate, cash, bitcoin, whatever, spread all around, you're much "richer" than ANYONE holding $113 billion in any single stock. You can get your hands on more money, cash, whatever with diversified assets versus liquidating any single asset or even asset class. And the Bill Gates' and Bezos' of the world know this. They preserve their stock valuations for their companies by not selling out totally. Instead they liquidate small portions, over time, diversify your assets, and those are your solid assets, and you can leverage the overvaluation of your stocks, for example to SLOWLY diversity "real" assets.
When you earn money, working a job, running a company, whatever, that profit you take, and reinvest, etc. turns into a financial instrument. Your 30 year mortgage is a financial instrument. You work and pay it monthly, plus interest (most on the front end by the way), and over 30 years you pay off your mortgage to the tune of around 200% of the original loan amount. The mortgage itself, as a now financial instrument, can be said to be worth twice as much as the loan was originally. That can be seen as an "asset" with an accrued value over time, and as such can be sold UP, repackaged as a security, and that security will be for the total value, which can then be leveraged to issue more debt as an "asset" even though it isn't. That's how the housing crisis happened. Those companies and financial institutions "too big to fail" thought they had an asset with X, based on 30 years of repayment, and when people defaulted in mass, because they leveraged more and more mortgages to issue more and more mortgages, that asset value popped, and in comes the federal reserve to buy that bad debt, then deposit it in shell companies as a writeoff, to keep the lenders solvent, then deemed they had been repaid. And that's how the financial crisis was "fixed". Same technique (on a massive scale) Enron used to cook their books and boost their stock prices and profits. The Federal reserve can do that, Ken Lay can't.
All of this rides heavily on LOW inflation, deflated labor value for the dollar, and cheap goods imported and cheap labor. High inflation deflates that long-term value of a host of financial assets, not just mortgages. As such, here we are.
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All-In [34092]
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Re: What gets me is the people today all jealous and angry over
Apr 21, 2021, 11:56 AM
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I'm on board with the assets being devalued. My own house is worth more than it should be, which is more than it was when I bought it, and it was too expensive back then.
Not sure if you're seeing it in your neck of the woods, but where I am, I can't afford a home where my parents lived, at a point when they were fresh out of school and weren't making a ton of money. In constant dollars I'm making more than they were combined, but my childhood home went from (this is not a joke) $30k in the 1970s to $600k today. That's a multiple of actual inflation.
I think the hyperinflation comes from the top 0.01% who can buy multiple of those homes and drive up the price for everyone else. The greater the divide between ultrarich and the middle class, the more the middle class will be driven from anywhere that the ultrarich are. The best-off of the middle class buy up houses in other areas, driving up the price there, and we all move out to shittier places than our parents lived in.
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Oculus Spirit [97647]
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Fresh out of college, just married, with a brand new
Apr 21, 2021, 12:23 PM
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household income maybe half what my single income is today, wife and I, with no assets, went house shopping for our starter home. We ran the numbers and came up with a feasible monthly mortgage payment we could manage.
So we went loan shopping. We "qualified" for a $400,000 loan on a 5 year interest only ARM tied to the LIBOR rate, which was like 3.5% at the time. So you pay interest only the first 5 years, below US interest rates at the time, and on year 5 you revert to whatever the going rate is, and it is a traditional ARM from there. Well, if we took the entire $400K loan, and bought a McMansion as our starter home, our monthly payments those first 5 years would have been, literally, within $50 of our budget target mortgage payment. AFTER 5 years, it would triple to $2,500K a month, WAY beyond our salaries, and then some.
It was absolutely insane, and I told the loan guy that. His solution? Sell in 5 years, take the appreciation in the hot market, and that little equity could be rolled into a bigger loan in 5 years, and we buy a bigger McMansion. And people actually DID THIS. And 5 years from 2003 is what....oh yeah, 2008. Imagine that.
No, as long as people can access debt, it's all manageable. Houses wouldn't be selling so high if there wasn't demand and people who can pay. It's very simple. My house has gone up 20% in the past year. I could sell it, make a killing, then spend 20% more on some a new house that's no better. It's all relative.
No inflation comes, or hyper inflation, when the value of the dollar tanks. Ever wonder why when there's an economic stimulus (in the past) it was always a bill that distributed all the money to programs, states, etc. It was to "create jobs". The key is the stimulus HAD TO be exchanged for labor. It was NEVER a direct payment to people. There's a reason for that. You give a company money, they hire people, and pay them to work, and that money is then exchanged for labor, so there's minimal inflationary impact. But between covid, and supply chain issues, and decreased productivity, and free checks, and boosted unemployment benefits, it's all coming together in a perfect storm. People don't NEED to work, and companies are having trouble hiring people fat and happy with their checks and unemployment. So they have to pay more, and there's increased demand, and less supplies of goods, it's a lot of stuff coming together, and yes, it is creating inflation, far more than in the past, and I don't care what the Federal Reserve says, or the CPI numbers, or whatever. Gasoline, ribeye steaks, eggs, bacon, fast food meals, housing, salaries and hourly pay, a lot of things are inflating now for many reasons. And as exposed as we are with debt, even 5% inflation is dangerous. 10% and we may have an economic collapse. It will never take much. 1982 inflation, and we implode. I think around 5-8% inflation and our debt servicing becomes the largest government expense. 10% and it becomes the largest expense. 15% and it's more than revenues. At that point we default. 10-15% inflation (1982 basically) and the United States government will be in default and unable to pay interest on it's own debt. Long before 15% the mortgage companies, banks, and the financial system would have collapsed. Stocks would have long ago crashed. But yeah, that's how little it takes to sink us, today. 5-10% crashes the stock market and financial systems. 15% and the government would be in danger of default.
And there would be no "assets" left to tax 
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All-In [34092]
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Re: Fresh out of college, just married, with a brand new
Apr 21, 2021, 1:19 PM
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That was really thorough, and I don't disagree much with what you said, but you didn't mention real estate exploding well beyond the national inflation rate. That's a really big deal. A good chunk of most people's income goes to housing.
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Oculus Spirit [97647]
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But at lower interest rates you can buy more house with
Apr 21, 2021, 1:46 PM
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stagnant income.
I mean at 6%, where we bought our first house, I sure couldn't afford this one. But I can at 2.125%
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All-In [34092]
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Re: But at lower interest rates you can buy more house with
Apr 21, 2021, 3:48 PM
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Do you think low rates are primarily responsible for the explosion in home values?
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Rock Defender [53]
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Re: But at lower interest rates you can buy more house with
Apr 21, 2021, 5:10 PM
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All-In [34092]
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OMG Tiggity = T3
Apr 21, 2021, 5:26 PM
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Did not see that coming
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Oculus Spirit [80954]
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Well, you conveniently left out Carter's average
Apr 21, 2021, 2:11 PM
[ in reply to What gets me is the people today all jealous and angry over ] |
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8% unemployment, (which back then was calculated differently--today that rate would probably be 20%), and also, teh energy crisis that ran us out f gas and the price of it skyrocketed.
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All-TigerNet [10865]
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All-In [31830]
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Isn't that graph wildly misleading?....
Apr 21, 2021, 4:02 PM
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that's a semi-honest question
I believe included in assets are stocks. To me, that is a tough one to gauge the true value of. What I mean is that for many of the cases, the stock can't simply be sold and expected to bring that value/worth.
Take Jeff Bazos...a quick sear shows he owns about 53 million share of Amazon. At current share price, that would be $178BB. If he sells 53 million shares of Amazon tomorrow, what do you think that sale price is going to be/average...answer is a whole heck of a lot less than current selling price.
I'm not saying the top 1% don't hold a lot of the assets, but rather, a lot of those assets are own paper and don't really have a set liquid worth.
So, the growth in the market value has a big influence on that graph and I don't believe that graph holds a lot of meaning...at least not in its intended purpose.
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All-In [34092]
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Re: Isn't that graph wildly misleading?....
Apr 21, 2021, 4:19 PM
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Dumb question maybe, but what assets other than actual dollars in a bank account aren't just assets "on paper"?
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Hall of Famer [24669]
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And what about my gold bars...?***
Apr 21, 2021, 4:24 PM
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All-In [31830]
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well, not really...
Apr 21, 2021, 5:04 PM
[ in reply to Re: Isn't that graph wildly misleading?.... ] |
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I mean, technically, yes, but effectively...no.
If you own 4 houses...when you go to sell those houses...even all 4 at once...the value of those houses don't plummet as a result of your actions. The value you think you have in the house may not be exactly what you actually get from the sales of it, but it's not typically going to be significantly off.
Same for land, jewels, art, etc...
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Hall of Famer [24669]
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Jewels and art... Two classic 'value' loopholes.
Apr 21, 2021, 5:07 PM
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Horses, antiques, etc.....
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Rock Defender [53]
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All-In [34092]
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Re: That’s very accurate
Apr 21, 2021, 5:25 PM
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Yup. Anytime I've had to do a valuation for something in litigation, I'm reminded that valuations are not real things.
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Hall of Famer [24669]
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All-In [31830]
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Do that and it won't be the rich that complain...
Apr 21, 2021, 5:06 PM
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it will be me and you.
Can you imagine getting a tax bill based on how much your 401k grew that year. Sorry, but that's a pretty stupid idea. And, in fact, it proves the point I'm making above.
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Hall of Famer [24669]
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There WOULD be a starting threshold for implementation.
Apr 21, 2021, 5:12 PM
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This thread started with the Top 1%... It might not apply but to the Top .01 %.
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